Stackelberg leadership in a dynamic duopoly with stochastic capital accumulation

I propose a dynamic duopoly model where firms enter simultaneously but compete hierarchically á la Stackelberg at each instant over time. They accumulate capacity through costly investment, with capital accumulation dynamics being affected by an additive shock the mean and variance of which are known. The main findings are the following. First, the Stackelberg game is uncontrollable by the leader; hence, it is time consistent. Second, the leader invests more than the follower; as a result, in the steady state, the leader’s capacity and profits are larger than the follower’s. Therefore, the present analysis does not confirm Gibrat’s Law, since the individual growth rate is determined by the timing of moves.JEL Classification: C61, C73, D43, D92, L13Financial support within the project The post-entry performance of firms: technology, growth and survival lead by Enrico Santarelli, co-financed by the University of Bologna and MIUR, is gratefully acknowledged. I thank Uwe Cantner, Roberto Cellini, Roberto Golinelli, Helen Louri, Enrico Santarelli, Antonello Scurcu, Peter Thompson, two anonymous referees and the audience at the final workshop of the project (Bologna, November 22-23, 2002) for useful comments and discussion. The usual disclaimer applies.     

Preferenza sociale non transitiva e teorema di Arrow

Questo lavoro estende il teorema di impossiblità di Arrow al caso di preferenza sociale stretta non transitiva. In particolare, si dimostra che se una Funzione di Decisione Sociale (FDS) soddisfa le condizioni di dominio universale, indipendenza dalle alternative irrilevanti, transitività della relazione di indifferenza sociale, il principio di Pareto forte e la regola di indifferenza paretiana, allora la FDS deve essere dittatoriale. Vengono inoltre illustrate le implicazioni di tale risultato per il caso in cui la FDS soddisfa la condizione di dualità.

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Summary This paper extend's Arrow's impossiblity theorem to the case where strict social preference may be intransitive. The main result of the paper is that if a Social Decision Function satisfies Unrestricted Domain, Independence of Irrelevant Alternatives, Transitivity of Social Indifference, the Strong Pareto Principle, and the Pareto Indifference Rule, then there exists a dictator. An application of this result is a new impossibility theorem concerning SDF obeying the condition of Duality. As a by-product of this analysis, the relationships between Neutrality and Duality are somewhat clarified.

     

Estimating the financial crisis’ impact on potential output

I use a multivariate Blanchard-Quah decomposition to investigate the financial crisis’ impact on potential output in the Euro area, the US, Japan, and the UK. I detect an impact for all countries, which is especially severe for the UK.     

Developing land use and transport PSS: Meaningful information through a dialogue between modelers and planners

One of the key barriers to integration of land use and transport planning is the lack of a “common language” (i.e. tools, instruments, indicators) that can support planners from both domains in developing shared visions and integrated strategies. Many of such tools and indicators have been developed in recent years, but not so many are implemented in practice. In this paper a new, participatory development approach for planning support systems (PSS) is proposed, termed “mediated planning support” (MPS) that addresses bottlenecks blocking this implementation. It is founded on insights from knowledge management, system dynamics and software innovation and is applied in the Greater Region of Amsterdam. This paper discusses the evolution of the PSS, highlighting the most useful elements which can be applied in other land use and transport planning projects. It offers insights for practitioners and researchers interested in land use and transport planning integration and for professionals that are dealing with supporting planning with information and technologies.     

Herbert J. Davenport on Conspicuous Consumption and the Economics of Feminism

This article analyzes Herbert J. Davenport’s discussions of conspicuous consumption and feminism. Even though these (typically) Veblenian topics represent two “episodes” in many respects disconnected with the central body of Davenport’s theoretical interests, the assessment of Davenport’s views on these matters enlarges our knowledge of the development of his thought. Our analysis shows how Davenport can be enrolled among the forerunners of the modern theory of positional goods. Moreover, our article offers some new findings on the impact of Veblen’s ideas on one of his closest students at the Chicago University.     

The influence of entrepreneurs’ immigrant status and time on the perceived likelihood of exporting

We contribute in this paper to the scant literature on the factors and conditions influencing the development of different perceptions of potential international opportunities for immigrant and native entrepreneurs in the pre-internationalization phase. Specifically, we investigate what factors influence the perceived likelihood entrepreneurs have of exporting. Building on entrepreneurial intentions and opportunity-based entrepreneurial processes, we propose a cognitive account of perceived likelihood of exporting based on entrepreneurs’ perceptions of the desirability and feasibility of export opportunities. We investigate how the immigrant status (i.e., individual characteristics) and time (i.e., contextual factors) influence the relationship between the desirability and feasibility of exporting, and entrepreneurs’ perceived likelihood of exporting. We employ an experimental design on a matched-pair sample of 108 native and immigrant entrepreneurs in domestic technology-based firms. The results are a unique account of the cognitive antecedents of the perceived likelihood of exporting under different temporal conditions, comparing immigrant and native entrepreneurs. We discuss theoretical and practical implications.

     

Integrating parametric and non-parametric multivariate analysis of urban growth and commuting patterns in a European metropolitan area

Quality & Quantity - Mono-centric regions have experienced a progressive transformation towards polycentric structures. Transition to discontinuous and dispersed spatial configurations was...     

Co‐integration Rank Determination in Partial Systems Using Information Criteria

We investigate the asymptotic and finite sample properties of the most widely used information criteria for co‐integration rank determination in ‘partial’ systems, i.e. in co‐integrated vector autoregressive (VAR) models where a sub‐set of variables of interest is modelled conditional on another sub‐set of variables. The asymptotic properties of the Akaike information criterion (AIC), the Bayesian information criterion (BIC) and the Hannan–Quinn information criterion (HQC) are established, and consistency of BIC and HQC is proved. Notably, the consistency of BIC and HQC is robust to violations of weak exogeneity of the conditioning variables with respect to the co‐integration parameters. More precisely, BIC and HQC recover the true co‐integration rank from the partial system analysis also when the conditional model does not convey all information about the co‐integration parameters. This result opens up interesting possibilities for practitioners who can now determine the co‐integration rank in partial systems without being concerned about the weak exogeneity of the conditioning variables. A Monte Carlo experiment based on a large dimensional data generating process shows that BIC and HQC applied in partial systems perform reasonably well in small samples and comparatively better than ‘traditional’ methods for co‐integration rank determination. We further show the usefulness of our approach and the benefits of the conditional system analysis in two empirical illustrations, both based on the estimation of VAR systems on US quarterly data. Overall, our analysis shows the gains of combining information criteria with partial system analysis.